Haier Group and General Electric announce a MoU to jointly focus on key areas like Industrial Internet, healthcare, and advanced manufacturing and develop a joint growth model. This strategic cooperation framework agreement brings two highly complementary world-class enterprises for cross-border investment and cooperation between China and the United States.
In addition, Qingdao Haier Co., Ltd, a Shanghai stock exchange listed company that is 41% owned by Haier, is also asserted to buy the GE Appliances business.
The As part of the acquisition, GE will receive a cash consideration from Qingdao Haier of $5.4 billion.
Qingdao Haier and GE Appliances will further enhance Qingdao Haier’s global competitiveness. Qingdao Haier acquired all overseas operations of Haier Group in June 2015, as part of the expansion of Haier’s global business.
Talking on this noteworthy moment, Zhang Ruimin, Chairman and CEO of Haier Group said, “This strategic alliance provides a new starting point for both Haier and GE and I am confident that this partnership will deliver enhanced value to the stakeholders of both companies. Further, we share common goals that we hope to achieve together: enhancing the value of the Haier and GE brands and developing our employees by encouraging autonomous innovation and cooperation.”
“We are pleased to be selling our Appliances business to Haier and to launch this new partnership. Haier has a stated focus to grow in the U.S., build their manufacturing presence here, and to invest further in the business. Innovation, new product introduction, and brand management are fundamental to their overall strategy. GE Appliances provides Haier with great products, state-of-the-art manufacturing facilities, and a talented team. In addition, we see the opportunity to work together to build the GE brand in China adds Jeff Immelt, CEO of GE.”
The acquisition of GE Appliances is an important investment in expanding Haier’s presence in the U.S. and in the Western hemisphere.GE Appliances will remain headquartered in Louisville, Kentucky. The business will continue to be operated independently under the direction of a local board with the participation of GE’s current senior management team, who will guide the strategy and operations of the business.
Haier is committed to investing in the continued growth of the U.S. business.
Liang Haishan, Chairman of Qingdao Haier Co., Ltd. commented, “Qingdao Haier and GE Appliances are leading appliance businesses in the Eastern and Western hemispheres. The alliance of both parties will lead to a great deal of mutual benefit. Qingdao Haier and GE Appliances are highly complementary businesses, particularly in the areas of brand, market, product innovation, and supply chain and quality management. This coming together will further enhance both the Haier and GE brands.GE Appliances’ highly-experienced and successful management team will continue to guide the direction of the business and will be involved in the governing board. In addition, Qingdao Haier will provide support and employee development opportunities within our global operating platform. We benefit from KKR’s experience and extensive network, which have really added value to this acquisition.”
The companies expect the transaction to close in mid-2016.